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Saturday, November 27, 2021

Rubber Rises Most in Six Weeks on Fed, BOJ Stimulus, Export Cut

Rubber advanced the most in six weeks on optimism that economic stimulus in the U.S. would improve demand and as Thailand mulled extending export cuts.

The contract for delivery in August rose as much as 3.6 percent to 283 yen a kilogram ($2,950 a metric ton) on the Tokyo Commodity Exchange, the biggest gain for a most-active future since Feb. 4. Rubber traded at 282.8 yen at 11:07 a.m. local time, paring this year’s loss to 6.5 percent.

The Japanese currency remained weak, boosting the appeal of the yen-denominated contract, after Nikkei reported that the new Bank of Japan (8301) Governor Haruhiko Kuroda would announce a policy shift at his first press conference. Asian stocks rose as the Federal Reserve said it would continue buying bonds to stimulate the U.S. economy, and data showed manufacturing in China expanded.

“The rubber market is bolstered by positive sentiment from Fed stimulus measures, the weakening yen and better-than- expected data in China, raising optimism demand for tires may increase,” said Chaiwat Muenmee, analyst at Bangkok-based commodity broker DS Futures Co. “Speculation that top producers will extend price support measures by another year also gives a boost.”

Thailand, the biggest rubber producer, will propose extending a reduction in shipments from top suppliers for a further year to curb a price slump, said Deputy Farm Minister Yuttapong Charasathien. Thailand, Indonesia and Malaysia, who represent 70 percent of global output, will meet in Phuket on April 10-12, Yuttapong said.

The contract for September delivery on the Shanghai Futures Exchange gained 0.8 percent to 22,985 yuan ($3,699) a ton. Thai rubber free-on-board remained unchanged for a third day at 85.60 baht ($2.93) a kilogram yesterday, the Rubber Research Institute of Thailand said on its website. That was the lowest level since November 2009, according to data compiled by Bloomberg.

Source: Bloomberg

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